After first complaining HCFA was giving New York teaching hospitals too big a break by paying them not to train medical residents, some federal lawmakers now are working to get a piece of the pie for their constituents.
Others, however, are looking to take the pie away.
The Medicare demonstration program announced by HCFA last month will pay New York hospitals $400 million to reduce the number of residents they train by 20% to 25% (Feb. 24, p. 10). That would cut about 2,000 of the more than 10,000 residents now being trained by the 41 teaching facilities in the program and save Medicare between $300 million and $600 million over six years.
The demonstration, first reported by MODERN HEALTHCARE last fall, was conceived and designed by the Greater New York Hospital Association and trumpeted at a press conference on President's Day.
Steamed about being left out, big teaching hospitals in other parts of the country began lobbying their congressional leaders for help.
"We've had a number of discussions with Sen. (Edward) Kennedy's (D-Mass.) staff," confirmed J. Richard Nesson, M.D., president of Boston's Brigham and Women's Hospital and chief executive officer of Partners HealthCare System, the hospital's Boston-based parent.
Nesson said that by limiting the demonstration to New York, HCFA, in effect, has created a perverse incentive. Teaching hospitals excluded from the demonstration might decide to increase the number of residents they train in anticipation of getting paid later for reducing training slots.
Partners began voluntarily trimming non-primary-care residency posts in 1994. The goal is to eliminate 165 positions-some 25% of total training slots-by 2000. With each resident eliminated, the hospital system loses $100,000 a year in Medicare graduate medical education payments.
But the world changed after HCFA signaled its willingness to dole out more money for the same thing.
Last week, several members of Congress, including Rep. Fortney "Pete" Stark (D-Calif.), said they were considering proposals that would open the program to all teaching hospitals that reduce the number of residents they train.
HCFA Administrator Bruce Vladeck said talks were already under way with officials in Michigan and Utah about subsidy programs different from the New York plan and HCFA would consider others.
Pennsylvania, which has 99 hospitals that train future physicians, is among a handful of other states mulling voluntary residency reductions.
"We are in active conversation with our members regarding whether we want to participate in this," said Carolyn Scanlan, president of the Hospital Association of Pennsylvania.
However, some lawmakers seem more intent on ending the plan than expanding it.
Sen. Phil Gramm (R-Texas) called the New York model "one of the stupidest proposals that I have ever heard of in my life."
Gramm, head of the Senate Finance health subcommittee, said he would propose a cutback in GME subsidies to reduce the number of residents without further government action (See story below).
Rep. William Thomas (R-Calif.), chairman of the House Ways and Means health subcommittee, questioned HCFA's authority to do a demonstration project as large as the New York plan.
"When (the demonstration) includes two-thirds of the hospitals that are the problem I don't know how you can call it a demo project; a relief project would be more appropriate," he said.
Rep. Nancy Johnson (R-Conn.) said the program was poorly structured and would not yield any usable evidence that would allow HCFA to conclude the demonstration was a success.
Karen Pallarito contributed to this story.